"We certainly have to evaluate it," an Intel spokesperson toldInfoworld. "It certainly could be a change in the competitive landscape."

We agree. AMD's plan to split itself into two companies—one focused solely on CPU/GPU design and the other a foundry—will, for better or worse, change the shape of the processor market. The deal is of particular concern for Intel, of course, because it holds the x86 CPU patent that drives the modern computing world. AMD, in fact, would never have held an x86 license at all, had IBM not insisted on a second source for x86 processors when it negotiated to purchase 8088/8086 chips from Intel waaaaaaaaaaaay back at the start of the PC industry. Once upon a time, AMD's right to possess that license was a point of bitter contention between the two companies. AMD's 80386 clone was both substantially delayed and avoided by OEMs (out of fear of Intel retribution) as a result, but AMD eventually triumphed in court and won the right to possess its license.

AMD's right to license x86 technology, however, has never been a blank sheet of paper giving the smaller CPU manufacturer unlimited access. AMD and Intel have renegotiated the former's license on several occasions, most recently in 2001, when AMD agreed to pay Intel royalties for the right to continue making x86 chips. The full (redacted) text of the agreement is here, but let me warn you in advance—it's so stripped down, it's almost entirely useless. Phrases like: "AMD agrees to XXXX in the event of XXXX" don't make for enlightening reading. There are, however, two interesting tidbits.

In the agreement, a subsidiary is defined as: "any corporation, partnership, joint venture, limited liability or other entity, now or hereafter, in which a party" owns or controls 50 percent of the assets (tangible and intangible) of the company, or holds more than 50 percent of the voting rights. Note that under the terms of the AMD foundry spin-off, AMD retains 50 percent voting rights, despite the fact that the Arabs own 55 percent of the foundry (not of AMD). I'm not sure if AMD Foundry would be considered a subsidiary of AMD, but if it is, Intel has the right to request a written statement from AMD affirming or denying that the company in question is bound by the terms of the x86 licensing agreement.

Intel's x86-64 license

There has been speculation that AMD might threaten Intel's x86-64 license if Intel threatens AMD's x86 license, but this doesn't appear to be possible. According to the terms of the licensing agreement, "In the event of such termination, the rights and licenses granted to the defaulting party shall terminate, but the rights and licenses granted to the party not in default shall survive such termination of this Agreement [emphasis added] subject to its continued compliance with the terms and conditions of this Agreement."

The question rests on whether or not Intel's access to the x86-64 patent is covered under the 2001 x86 license or was negotiated separately. Just to clear up some potential questions, no, Intel did not develop its own "x86-64," and yes, AMD did grant Intel a license. An old Inquirer article implies that AMD was less-than-eager to license AMD64 to its rival (implying that the new technology wasn't automatically grandfathered into the 2001 agreement), but an agreement was in place by April 25, 2002, as reported here. The 2001 license took effect on May 4, 2001, which leaves precious little time for AMD to have "Hammered" out separate agreements. Right now, it's impossible to determine which of these two scenarios actually played out, and no evidence on whether or not counter-threatening Intel's x86-64 license would even be an effective strategy.

Alternatively, AMD may have structured its Arabian deal in such a manner as to avoid the stipulations and restrictions Intel placed upon it. Even without the specifics of the license available, we know (or think we know) a few of these, specifically:

AMD's x86 license is almost certainly unique to AMD. If
Advanced Micro Devices ceases to be a going concern or is purchased by
another company, the x86 license—and possibly all the patents
associated with it—cease to be valid

Under
the terms of the license, AMD is not allowed to outsource more than a
certain percentage of its processors to third-party foundries.

It's possible—indeed, it seems likely—that AMD built this deal from the ground up with all of its restrictions in mind. Asset Lite (a far more appropriate term than "asset smart,") was first trotted out quite some time ago, and it wouldn't be surprising if AMD was in negotiations before then, as the entire plan hinged on Arabian cooperation. With over a year (and possibly two) to consider the situation, and the terms of the license right in front of it, it's hard to believe AMD built the plan first, then belatedly went, "Oh, yeah—Intel."

Bottom line? We'll have to wait and see. From our current vantage point, all we can do is agree with ol' Chuck that yes, this situation would be of great concern to Intel. Pulling AMD's license, meanwhile, even if it has the right to do so, may not be practical. Doing so would immediately turn the company's alleged monopoly and history of market abuse into a de facto monopoly, and would make the company even more of a target for regulatory agencies than it already is. Even if, somehow, all the cards turned up in Intel's favor, denying its only competitor access to the core technology that allows it to compete seems a bit rash.